Pulses selling below support prices in over 200 markets: Report
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New Delhi: Prices of rain-fed kharif pulses dipped below government-announced support prices in December in more than 200 mandis or wholesale markets, according to a commercial intelligence report on pulses from the research division of NCDEX commodity exchange.
Short-term government interventions have failed to reduce price volatility in pulses in 2016, the report released this week said, adding that an overestimation of chana (chickpea) production by the government, at wide variance with market estimates, contributed to the volatility.
“The situation has become grim with the start of fresh arrivals of kharif-grown pulses like moong, urad and tur,” the report said, adding, “around 200-300 mandis across states have seen prices going below minimum support prices (MSP).”
According to the report, major pulse-growing states like Rajasthan, Madhya Pradesh, Maharashtra, Karnataka and Gujarat are the worst affected following the record harvest of kharif pulses.
In December, tur or arhar, a major kharif pulse, traded below MSP in 268 mandis across 11 states, the report said, while moong sold below MSP in 320 mandis in 12 states.
Data from the report further shows that on 30 December tur sold at 11% below MSP while moong sold at 19% below support prices.
However, chana prices have defied the good monsoon (in 2016) and prices have not cooled despite government actions like suspending futures trading in NCDEX and extension of stock limits on traders, the report said.
It added that “there was a large deviation in the production estimates of the government and market sources. Indian government estimated chana production at 7.17 million tonnes (for the 2015-16 harvest) while market estimates put it at merely 6.5 million tonnes.”
Reliable production estimates from the government will help in better planning and check volatility in prices, the report said.
The doubts over government estimates of chana follow those of wheat where the government estimated a robust wheat crop (2016 spring harvest), which was at least 5 million tonnes more than what was estimated by traders.
According to the report, short-term government interventions did not arrest the price volatility and “there is need to address the long-term supply constraints through augmenting production, rationalizing the MSP, maintaining a rich buffer stock of pulses through active procurement at the time of harvesting, besides timely imports.”
Data from the report shows that between January and November (2016), India imported around 4.62 million tonnes of pulses, comprising of pea (48% share), chana (13%), masur (13%), tur (12%), urad (8%) and moong (6%).
In the ongoing rabi (winter) crop season, planting of chana has increased by 14% compared to last year, but imports are estimated to rise in the coming months, the report said.